Ask HN: Should I continue to work for free?
59 comments
WHAT THE HELL ARE YOU DOING WHY WOULD YOU EVER WORK FOR FREE AND THEN EXPECT TO BE PAID AHHHHH.
But for real though, don't work for free, and don't work without a contract in place unless you're doing charity work. You've been working for them forever without them paying you. What incentive do they have to pay you now?
But for real though, don't work for free, and don't work without a contract in place unless you're doing charity work. You've been working for them forever without them paying you. What incentive do they have to pay you now?
Am I perhaps missing something in the OP question?
What motivates you to invest eighteen months of free work for a commercial start-up? Friendship? Promises of a significant reward? Genuinely interested in what drives you.
What motivates you to invest eighteen months of free work for a commercial start-up? Friendship? Promises of a significant reward? Genuinely interested in what drives you.
Maybe the job was easy enough (takes little number of hours, OP mentioned "advising"), but is also interesting in some way and OP sees it as something that helps them grow. The prospect of significant returns after some serious investor comes in later - but if one was not compensated before, that is unlikely to change even if big money comes along.
Normally I'm a stickler for HN rules about e.g. caps lock for emphasis. But in this case it's warranted.
OP, please take this as a lesson. For a significant portion of my career thus far I've been in consulting/advisory positions with startups between the seed and Series A stages of funding. I have never, ever worked with a company for the first time without first getting a confirmed deposit payable towards the final invoice.
In the fast and loose world of startups, rule number one is "Can they pay me?" Employees should be paid before founders, not the other way around.
Practically speaking - engage a lawyer, send a letter and sue if the economics of that equation make sense. If they don't, cut your losses and move on with a lesson. Refer to some of the other comments here echoing the legal advice.
OP, please take this as a lesson. For a significant portion of my career thus far I've been in consulting/advisory positions with startups between the seed and Series A stages of funding. I have never, ever worked with a company for the first time without first getting a confirmed deposit payable towards the final invoice.
In the fast and loose world of startups, rule number one is "Can they pay me?" Employees should be paid before founders, not the other way around.
Practically speaking - engage a lawyer, send a letter and sue if the economics of that equation make sense. If they don't, cut your losses and move on with a lesson. Refer to some of the other comments here echoing the legal advice.
They aren't going to pay you. You're probably the subject of jokes he tells his friends.
However, if they never paid you, it means that any code you've done remains your exclusive property (i.e. the company has no right to use it without your approval, since there was no consideration under which a claim of work for hire would succeed). That's your one bit of leverage here. Make the company buy out your code. Then find a paying job that actually respects you.
However, if they never paid you, it means that any code you've done remains your exclusive property (i.e. the company has no right to use it without your approval, since there was no consideration under which a claim of work for hire would succeed). That's your one bit of leverage here. Make the company buy out your code. Then find a paying job that actually respects you.
This is an interesting angle. I'd suggest talking to an attorney on this. I'm hesitant to weigh in because I'm not that kind of lawyer (and it's the internet, and I'm probably a dog)
DEFINITELY talk to a lawyer about this! It is a sound legal strategy to point out to them that they have acquired no rights to your code, but there are some pitfalls here that are best avoided by speaking to a lawyer. I suggest not threatening them with anything at this time and also not simply yanking their access to anything you've done, until and unless your lawyer says it is time. Both of those things carry their own risks, and in the end you're far better off using the legal system to redress these issues than trying technical solutions. Plus the technical solutions all pretty much involve burning bridges; your career is far better off if you can show your next employer that they burned the bridges, not you.
Do not be afraid to speak to the lawyer. Real employers understand that you are not expected to work for free.
Do not be afraid to speak to the lawyer. Real employers understand that you are not expected to work for free.
If you really care a lot, you can threaten to file takedown requests with Amazon Web Services or whoever their host is. Copyright assignment must be done explicitly unless you are an employee
You are too kind and very naive. By what you wrote, those people are taking advantage of you and abusing your knowledge and time. You supposed to say something while ago. They saw that you are not making any comments and you are not raising your voice. And then they thought, OK let's use this guy as much as we can. If they weren't thinking like that, they would offer you a fair compensation long time ago. If there was not enough cash, then at least in some shares. Their plan was to use you to the point where you are not needed anymore. And I think that is when they employed new full time CTO. I think it is too late to do anything now. If you don't have anything on paper you will gain nothing for you previous work.
Have you signed an IP assignment contract? Since these people appear to be flying a bit loose, I wouldn't be surprised if the answer is no.
Offer to sign one in exchange for having the stock issue resolved.
Offer to sign one in exchange for having the stock issue resolved.
This!
It might* help you to create the contracts. Any competent company won't want to use them but it could lower the resistance for them to agree.
*IANAL
It might* help you to create the contracts. Any competent company won't want to use them but it could lower the resistance for them to agree.
*IANAL
Not just the stock issue. The stock is worthless. Get some cash for the IP.
Nah. They should offer to sign one in exchange for cash.
Get out. Now.
Let's review:
- If you're helping run an early-stage company but you're not drawing a paycheck, you're a co-founder. This means you should have a significant amount of ownership, and you should be publicly acknowledged as a co-founder everywhere it's relevant.
- Let's say you're an employee and not a co-founder. If the official founders are being paid and an employee isn't, the company is operating backwards. Employees should get paid first, then founders.
- If the company is funded, then nobody should be working for free.
- It's one thing to help out a friend running a company for free. I don't agree with it, but I can understand it. But when you have an actual title, especially one as important as "CTO", that crosses a line from "helping a friend out" to "employee or co-founder of the company".
Let's review:
- If you're helping run an early-stage company but you're not drawing a paycheck, you're a co-founder. This means you should have a significant amount of ownership, and you should be publicly acknowledged as a co-founder everywhere it's relevant.
- Let's say you're an employee and not a co-founder. If the official founders are being paid and an employee isn't, the company is operating backwards. Employees should get paid first, then founders.
- If the company is funded, then nobody should be working for free.
- It's one thing to help out a friend running a company for free. I don't agree with it, but I can understand it. But when you have an actual title, especially one as important as "CTO", that crosses a line from "helping a friend out" to "employee or co-founder of the company".
You are getting taken advantage of. You, your kindness, your naivety.
Just tell them sorry you can't provide free advice/support any longer. Then stop, cold turkey. Don't let them come back and say: "just stick with us...." or "well can you tell us how this works" or "before you go we need..."
Just tell them sorry you can't provide free advice/support any longer. Then stop, cold turkey. Don't let them come back and say: "just stick with us...." or "well can you tell us how this works" or "before you go we need..."
Now there is a CTO coming on board with a set salary you have a benchmark to compare yourself against.
I would write an e-mail to say that you are wrapping things up and at the end of this week will be done.
If they act surprised or demand you to work for the next two weeks tell them sure but you'll be billing them at a daily rate (regardless of if work takes place if you're a CTO, you're on call) and send over a standard contract.
They will never discuss your worth unless they are put in a difficult position where they have to. Do not do any more work until you have a signed contract. If they never sign it then you're done.
Don't stay on as an advisor unless it's something you really love, it will just make you mad to have put in so much effort and never have been compensated in return.
I would write an e-mail to say that you are wrapping things up and at the end of this week will be done.
If they act surprised or demand you to work for the next two weeks tell them sure but you'll be billing them at a daily rate (regardless of if work takes place if you're a CTO, you're on call) and send over a standard contract.
They will never discuss your worth unless they are put in a difficult position where they have to. Do not do any more work until you have a signed contract. If they never sign it then you're done.
Don't stay on as an advisor unless it's something you really love, it will just make you mad to have put in so much effort and never have been compensated in return.
Get a lawyer and begin sending threatening letters to the full extent of the law. They will settle.
Most here will say "learn a life lesson and move on". The point of getting legal is investors will be very interested in why the founders have taken advantage of you like this. Naturally the founders will want to avoid risking the investor's cash/rep and getting them involved etc so will likely offer to settle.
Most here will say "learn a life lesson and move on". The point of getting legal is investors will be very interested in why the founders have taken advantage of you like this. Naturally the founders will want to avoid risking the investor's cash/rep and getting them involved etc so will likely offer to settle.
OP, this seems like sound advice if you don't want to just walk away from the mess.
You and your fellow free-worker have already raised the issue and have not had a satisfactory outcome. If you stop working for free, they will pull the carrot away and you will get nothing. If you keep working for free, you will get nothing since you already have nothing.
When you work for free, you are saying that your time and effort are worth nothing. Your "co-founders" got the message loud and clear and are unfortunately not "good" people so they are operating on that premise and yet they value the time and efforts of the new CTO.
You and your fellow free-worker have already raised the issue and have not had a satisfactory outcome. If you stop working for free, they will pull the carrot away and you will get nothing. If you keep working for free, you will get nothing since you already have nothing.
When you work for free, you are saying that your time and effort are worth nothing. Your "co-founders" got the message loud and clear and are unfortunately not "good" people so they are operating on that premise and yet they value the time and efforts of the new CTO.
No. Absolutely NOT! You are not helping them, they are helping themselves to your generous demeanour at your expense. You need to learn how to negotiate better, which is merely a learned skill, not something you are born with.
Go listen to the first 1/3rd of Roger Dawson's classic series: http://www.audible.com/pd/Business/The-Secrets-of-Power-Nego...
From his material:
There are three simple rules to follow when striving for Win-Win negotiations:
• Do you narrow negotiations down to one issue? When you do, there can only be a winner and a loser. Broaden the scope of negotiations. Take into account all the elements and piece together those elements like a jigsaw puzzle until both sides are satisfied and can win.
• Never assume you know what the other party wants. Get to know the person, rather than the business or the prospective deal.
• Understand that people are different and have different perspectives on the negotiations. Never assume that money is the bottom line.
Go listen to the first 1/3rd of Roger Dawson's classic series: http://www.audible.com/pd/Business/The-Secrets-of-Power-Nego...
From his material:
There are three simple rules to follow when striving for Win-Win negotiations:
• Do you narrow negotiations down to one issue? When you do, there can only be a winner and a loser. Broaden the scope of negotiations. Take into account all the elements and piece together those elements like a jigsaw puzzle until both sides are satisfied and can win.
• Never assume you know what the other party wants. Get to know the person, rather than the business or the prospective deal.
• Understand that people are different and have different perspectives on the negotiations. Never assume that money is the bottom line.
Working for free like this is essentially playing the lottery.
I worked for free too for a startup, for about 6 months.
They had trouble getting the right investor. Story was, they had one but then a company said they would buy them right away, so they didn't take the investors money. Instead they talked to new investors and told them about the new buying offer they received to get better conditions from the investors.
Long story short, I got my money in the end, they even paid me all sick days (I'm a contractor and in the hospital while working there) so it wasn't that bad for me.
They hired me to work remote for them, I stayed because I wanted to add more remote working experience to my resume.
Also, my thought if they really paid me in the end, they would see me as a valuable and flexible partner, who they will hire again.
Anyway, now I got almost two years of remote work experience and quite good money out of it.
But this story could also went otherwise and I would be forced to take the next best job I find, if I ran out of money before they could pay me...
I worked for free too for a startup, for about 6 months.
They had trouble getting the right investor. Story was, they had one but then a company said they would buy them right away, so they didn't take the investors money. Instead they talked to new investors and told them about the new buying offer they received to get better conditions from the investors.
Long story short, I got my money in the end, they even paid me all sick days (I'm a contractor and in the hospital while working there) so it wasn't that bad for me.
They hired me to work remote for them, I stayed because I wanted to add more remote working experience to my resume.
Also, my thought if they really paid me in the end, they would see me as a valuable and flexible partner, who they will hire again.
Anyway, now I got almost two years of remote work experience and quite good money out of it.
But this story could also went otherwise and I would be forced to take the next best job I find, if I ran out of money before they could pay me...
A fair offer would be anywhere from:
- 0.25% if your role was closer to a part-time adviser, following-up monthly for a few hours to advise on technical choices
- to 20% if you worked close to full time for about a year as CTO
Of course, since you forgot to negotiate anything ahead of time, you are mostly out of luck, practically speaking. There are some legal avenues you could explore, depending on whether you contributed any IP, what paperwork you signed, etc.
It's time you stand up for yourself. By the way, for companies that are mismanaged (and this is clearly one of them), the likelihood of success is even lower than for your average startup, so any stock you may fight for will probably be worthless.
In conclusion, I would at a minimum demand the standard 0.25-0.75% deal that any formal advisor can get. And that's an absolute minimum. In exchange for no more work from you at all.
source: founder equity calculator (http://foundrs.com)
- 0.25% if your role was closer to a part-time adviser, following-up monthly for a few hours to advise on technical choices
- to 20% if you worked close to full time for about a year as CTO
Of course, since you forgot to negotiate anything ahead of time, you are mostly out of luck, practically speaking. There are some legal avenues you could explore, depending on whether you contributed any IP, what paperwork you signed, etc.
It's time you stand up for yourself. By the way, for companies that are mismanaged (and this is clearly one of them), the likelihood of success is even lower than for your average startup, so any stock you may fight for will probably be worthless.
In conclusion, I would at a minimum demand the standard 0.25-0.75% deal that any formal advisor can get. And that's an absolute minimum. In exchange for no more work from you at all.
source: founder equity calculator (http://foundrs.com)
> I feel like I have been taken advantage of
You were taken advantage of. And forget about it, they will pay you nothing.
Move on and accept it as a life-lesson.
You were taken advantage of. And forget about it, they will pay you nothing.
Move on and accept it as a life-lesson.
This might help you decide:
http://www.shouldiworkforfree.com
http://www.shouldiworkforfree.com
I particularly like how “Is it for a legitimate business?” branches out into several sub questions that all end with “No.”.
Relevant, for any contractor/consultant reading this: "Fuck you, pay me." https://www.youtube.com/watch?v=6h3RJhoqgK8
Short answer: You've been screwed over and are not going to get a dime.
Long answer: You're probably not going to get a dime. Learn from this experience and don't get suckered into this type of situation in the future.
Long answer: You're probably not going to get a dime. Learn from this experience and don't get suckered into this type of situation in the future.
That is not a serious business, more like some fly-by-night operation. It doesn't sound like you've signed anything? Remember that none of the code you've written is the property of the company without an IP assignment.
While you're a fool for having worked without a contract (even just two co-founders workers alone will sketch out an agreement on a napkin), so is anyone who has invested into this "business" where the IP itself might be owned by god knows who.
While you're a fool for having worked without a contract (even just two co-founders workers alone will sketch out an agreement on a napkin), so is anyone who has invested into this "business" where the IP itself might be owned by god knows who.
The way to proceed it to be decisive in asking for what you want in exchange for the IP and work you've put in. Time for negotiation is over. Based on your past conversations, ask for what you think was agreed upon or what would have been fair at the time. If you can reference emails, texts, or other discussions, do it. Put it in writing, send certified mail, etc. It should be clear that 1) your work is done 2) payment or any consideration is for past works and the company will then own it 3) put a deadline for them meet your request. You should make it clear that you will exercise legal options. You may even want to get a lawyer to draft this up and deliver it to them, so it's official and carries more weight.
This is a low aggression way to get what you want. Yet somewhat official and displays you are serious about getting compensated for the past work. Done right, there should be no bad blood from this. If they ignore it, and you go the legal route; the relationships/friendships will have to be sacrificed.
This is a low aggression way to get what you want. Yet somewhat official and displays you are serious about getting compensated for the past work. Done right, there should be no bad blood from this. If they ignore it, and you go the legal route; the relationships/friendships will have to be sacrificed.
I believe there was a lecture in startup school once that nobody is allowed to work for free for legal reasons. http://www.startupschool.org/
This is a massive paraphrase from a lecture (I think by the pair of lawyers) and I might not be remembering it completely correctly...
But all work is assumed to be done for remuneration of some kind. So if you don't get paid, they are exposed to lawsuits at some point in the future. You (I assume) could come back one day and say something like "they have no records of paying me, but a promise was made for X% of the company" and I imagine have a case in court. (again, 100% based on vague memories from the source which I think was Startup School.
This is a massive paraphrase from a lecture (I think by the pair of lawyers) and I might not be remembering it completely correctly...
But all work is assumed to be done for remuneration of some kind. So if you don't get paid, they are exposed to lawsuits at some point in the future. You (I assume) could come back one day and say something like "they have no records of paying me, but a promise was made for X% of the company" and I imagine have a case in court. (again, 100% based on vague memories from the source which I think was Startup School.
I think this is the same as the IP angle others have pointed out. If there was no contract (written or verbal), then no IP transfer took place and OP still owns all the work they did. Contracts also can't transfer value without proper consideration. So even if there was some sort of contract, it's not valid until OP receives compensation for the IP.
Thanks! That's a way better description of my version.
> ... the investors may not be willing ...
Perfect. You now have no reason to do an extra minute of output. Let the founders and other C level exec's beg the investors for your help.
Perfect. You now have no reason to do an extra minute of output. Let the founders and other C level exec's beg the investors for your help.
Never work for free.
The entire purpose of working is to exchange your contribution for something of value. Whether that value is an intellectual reward, money, equity, etc. is up to you. It seems that in the beginning you valued the intellectual reward the project gave you, but that is now dwindling.
I would have a frank conversation about your compensation and IP, and be prepared to move on. Don't let your emotions get the best of you, this is business.
The entire purpose of working is to exchange your contribution for something of value. Whether that value is an intellectual reward, money, equity, etc. is up to you. It seems that in the beginning you valued the intellectual reward the project gave you, but that is now dwindling.
I would have a frank conversation about your compensation and IP, and be prepared to move on. Don't let your emotions get the best of you, this is business.
Betteridge's law of headlines says no
https://en.wikipedia.org/wiki/Betteridge's_law_of_headlines
Don't work for free. Not for a day. Not for an hour. Stop working and move on.
https://en.wikipedia.org/wiki/Betteridge's_law_of_headlines
Don't work for free. Not for a day. Not for an hour. Stop working and move on.
Welcome to the business world. I'll tell you something, if people see you can work for free they'll never pay you, they will work you to the bone, and then dump you like a piece of crap when you are useless to them. If someone promises you something then ask him to write down that promise somewhere you can keep. You might need it when you want to sue.
Now is the time to not do any more work until you get paid. You have the money.
Furhermore, if you have any documented promises to pay, including shares, then you are owed a debt.
Try to engage a collection agency. They will cost you nothing and will be the bad cop for a while even as you get to be the good cop, or at least the cop who doesn't call them.
Furhermore, if you have any documented promises to pay, including shares, then you are owed a debt.
Try to engage a collection agency. They will cost you nothing and will be the bad cop for a while even as you get to be the good cop, or at least the cop who doesn't call them.
No.
Unless there's more to this. How did this situation even arise in the first place? How do you earn a living?
Unless there's more to this. How did this situation even arise in the first place? How do you earn a living?
They contacted me directly, asking if I'd help. I said yes.
I am a PhD Student with a (small) stipend.
I am a PhD Student with a (small) stipend.
Unless you are willing to sue you'll never get anything. They already have put you into the category of "useful idiot who works for free".
A little test: tell them you will work for a reasonable market rate for consultants and see what happens.
A little test: tell them you will work for a reasonable market rate for consultants and see what happens.
No matter what you've written after this question, the answer is always no.
always.
no
ffs
no
always.
no
ffs
no
You have been taken advantage of!
My advice, walk away now and ignore all calls/texts/emails unless they are contacting you to offer you equity/money!
My advice, walk away now and ignore all calls/texts/emails unless they are contacting you to offer you equity/money!
If you are smart enough to write this, you are beyond smart to know exactly what to do? I'm curious, why you are working for free?
Short answer: NO. Not for free.
Long answer: sorry, you should pay for a more articulated advice. (Yes, this is the first lesson).
Long answer: sorry, you should pay for a more articulated advice. (Yes, this is the first lesson).
I call troll. Also, I saw a story VERY similar to this one on Reddit two weeks ago.
Do you have any of their promises in writing?
No
Stop working for free now.
Do you have leverage?
TurboHaskal(1)
Didn't even read the text. No. Don't. There is never a reason to work for free, unless it's your first internship.
The startup has received funding totalling around $600k USD over 2 rounds. Since the 1st round of funding, the full-time two co-founders and designer have been receiving a (low) salary, but a salary nonetheless. Having recently received a second round, this is likely to increase.
After my first 6m, I was entitled to options and told I would be sent the details and confirmation shortly. I chased this up last week (18m later), and was told they hadn't implemented a benefits scheme so hadn't been formally allocated anything, but that it was being worked on.
After the second round of funding, I advised them that they should get a full-time CTO. The new CTO starts in 2 weeks time and is on decent money. The intention is that I stay on in an advisory role.
Another guy in the team in a similar position (he has done unpaid work, but invested less time than I) recently enquired as to whether in light of investment, we would receive any bonuses. The CTO answered that he would like to offer us something, that the investors may not be willing, but that we should find out in the next month or so.
I am still being asked to do work. Should I do it? So far, I have received no cash or shares. They have hired a well paid CTO to do my job full-time. I feel like I have been taken advantage of, but am not sure if it's worth holding out given that I may receive some payment and be allocated options.
Seeing others being paid for their work while I am essentially working on a voluntary basis is very demotivating.
Advice would be appreciated!